* Yelp shares rally on results, boosting Internet names
* Textron and Cardinal Health fall after results
* AT&T approached DirecTV about possible acquisition: WSJ
* Dow flat, S&P 500 up 0.1 pct, Nasdaq up 0.6 pct (Updates to midday trading)
By Ryan Vlastelica
NEW YORK, May 1 (Reuters) - U.S. stocks rose on Tuesday, shrugging off early losses as the Nasdaq advanced alongside Internet names, which were boosted by strong results from Yelp.
Equities had opened mildly lower, with investors finding few reasons to keep chasing gains following a record close in the Dow on Wednesday. Some disappointing quarterly results, including from Cardinal Health and Textron, also limited gains.
Yelp Inc jumped 13.8 percent to $66.35 a day after reporting strong revenue growth. The results lifted Internet names, which have slumped recently on concerns that they, along with biotech "momentum" names, were overvalued. Netflix Inc rose 6 percent to $341.54 while TripAdvisor Inc added 4.1 percent to $84.07 and Facebook Inc was up 3.3 percent to $61.76.
"Yelp is rocking today, and when you have a group that has been beaten up over the past month, along with a market that is setting new highs, that's a cue for momentum players to come back into the market," said Michael Matousek, head trader at U.S. Global Investors Inc in San Antonio. "Internet is the place to be today."
The Dow Jones industrial average was down 0.74 points, or 0.00 percent, at 16,580.10. The Standard & Poor's 500 Index was up 2.24 points, or 0.12 percent, at 1,886.19. The Nasdaq Composite Index was up 23.58 points, or 0.57 percent, at 4,138.13.
On the downside, Cardinal fell 5.2 percent to $65.90 as its revenue missed expectations, while Textron lost 2.3 percent to $39.95 following its results.
U.S.-listed shares of Sony Corp fell 1.5 percent to $17.38 after the company cut its earnings outlook for the third time in a year, forecasting barely 10 percent of its initial outlook.
DirecTV Inc rose 5.5 percent to $81.86 after the Wall Street Journal reported that AT&T Inc had approached the company about a possible acquisition. Shares of AT&T dipped 0.2 percent to $35.63.
Jobless claims unexpectedly rose in the latest week, though the underlying trend continued to point to an improving labor market. U.S. consumer spending recorded its largest increase in more than four and a half years in March.
U.S. manufacturing growth accelerated for a third straight month in April, according to the Institute for Supply Management's index of national factory activity. (Editing by Bernadette Baum and Nick Zieminski)